The supply chain benchmarking World Cup

It has taken most people (the sensible ones) only a few days to get over the result of the World Cup final and at least we can say we made it to the top of the scoreboard. In fact, us Dutch came second in the world in this four-yearly affair. So what about the supply chain Top 25, drawn up by American analysts at AMR Research? The scores of their annual top 25 have only just been published. These are determined partly by financial figures and logistical achievements (stock turnover) as well as the opinions of the analysts at AMR. The other half of the total score is determined by evenly weighted votes from 154 supply chain professionals. One important note should be that the AMR Supply Chain Top 25 consists of only Global Fortune 500 companies. In other words, the largest multinationals worldwide. Personally, I think this is less of a problem than the fact that 80% of the votes are American, putting more US companies on the list than any other country. Who says American companies are leaders in the field of supply chain management?

 Probably thanks to my weakness for positive feedback and my considerable network in the supply chain, I happened to run into Debra Hofman, project manager in charge of the Top 25 list at AMR this year. I took the opportunity to pass on the names of a handful of European companies that will now been given a vote too. I found myself discussing, at length, my opinions on this list of top 25 companies in an extensive telecon with Hofman during the World Cup. In my view, it would be much more worthwhile to compare companies from the same sector. How does PepsiCo compare to Coca-Cola Company for example? And Unilever to Procter & Gamble? Then you might actually uncover a benchmark at a higher level. This would help avoid the problem that when benchmarking, business processes are very difficult if not impossible to compare. Of course the criticasters of benchmarking claim that it’s only the followers who want draw comparisons; leaders just choose their own way of doing things.

 Yet it remains interesting to compare companies, and perhaps even more so when the companies come from varying market sectors. It’s inspiring; makes room for new ideas and new insights: perhaps even making room for companies to exchange successful strategies across the different sectors… During this conversation with Hofman, I suggested setting the top 25 list up in a similar way to the World Cup. You could start with 16 pools, each with 5 companies from the same sector: 80 companies in total. Two of these companies then qualify based on their latest figures. After the first round, there would be a knock-out round in which the AMR analysts and supply chain professionals vote for the two candidates with the best supply chains. Just like in a football tournament, companies from one and the same pool (sector) would have more of a chance of facing each other in a later round. Debra was very enthusiastic. She also liked my idea of giving a number of companies a so-called wild card. This would mean you could give companies that are currently excluded from taking part, Audi, Heineken, Airbus and Li&Fung for example, a chance to join in. Debra suggested that I be the one to hand out the five wild cards to European companies every year. A huge honour and a huge responsibility! Perhaps I should organise a qualifying round in Europe first….

 According to Debra, our conversation couldn’t have come at a better time. AMR is on the verge of rethinking their methodology for selecting the top 25. Moreover, the World Championship Soccer is one that the Americans won’t forget in a hurry considering their team’s relatively successful performance. Debra mentioned that she found it just a little frustrating that Apple had made it to number one yet again this year. So I’m rather keen to find out what the new-look AMR Supply Chain Top 25 will look like. Hopefully, more supply chain professionals (from Europe and Asia especially) will be convinced to take part when they realise how much fairer the system has become. In any case, I still feel that when it comes to the supply chain, just like football, we continue to learn a lot by comparing companies with one another.

Martijn Lofvers, Publishing Director & Chief Editor, Supply Chain Magazine
martijn.lofvers@supplychainmedia.nl